Japan’s economy shrinks for third quarter

Japan’s economy fell into recession for the third consecutive
quarter as exports and consumer spending dropped due to the aftermath of
earthquakes and tsunami in March, reported the Japanese Cabinet Office
on August 15.

During the second quarter of 2011,
Japan ’s economic growth rate contracted by 0.3 percent from the first
quarter, down 1.3 percent over the same period of last year.

Meanwhile, the consumer price index fell 0.1 percent and exports
dropped 4.9 percent compared to the first quarter, the sharpest decline
over the past two years. This was attributable to a strong JPY, a slump
in domestic industrial production and slowing overseas economies.

Additionally, the gross domestic product (GDP) saw a year-on-year
decrease of 5.7 percent and a quarter-to-quarter fall of 1.4 percent.

On August 12, the Japanese Cabinet Office lowered this
year’s economic growth forecast to 1 percent from 1.5 percent in the
previous report. However, it forecast that the economy would grow
between 2.7 and 2.9 percent in the fiscal year 2012.

Economists from Japan ’s NLI Research Institute said the country’s
economy is likely to strongly recover in the next quarter./.